The major findings of this study appear in the "Executive Summary." They suggest several conclusions.

First, the SOS proposal would have had its most significant
impact on Michigan through its state spending cap. As noted in this study, the
proposal’s local tax issues would have been resolved over time through the
courts and would have represented a change in the degree, not the nature of, the
local taxpayer provisions under the Headlee amendment. And while ending publicly
funded pensions for new Michigan lawmakers would indeed have affected the state
budget, that budget impact is small in comparison to the impact of the state
spending cap over the long term.

The evidence suggests that the SOS proposal would have
significantly restrained state government spending growth while allowing annual
spending increases: State spending from state resources would have been reduced
by an estimated $9.6 billion in total between fiscal 1995 and fiscal 2007. This
extra money would have generated a fiscal 2005 state budget stabilization fund
estimated at $2.5 billion, compared to the effectively empty stabilization fund
that actually existed in 2005. This $2.5 billion would have been available to
insulate the state budget from future revenue declines resulting from a
depressed state economy.

Currently, the Headlee amendment to the state constitution
implicitly caps Michigan government spending. In fiscal 2000, state spending
exceeded the Headlee limit by $159.7 million. At least since 1995, however,
Michigan government spending has been restrained in practical terms only by the
relative strength of the Michigan economy.

During years when a strong economy has produced increased tax
revenue, Michigan lawmakers and governors have spent much of the additional
revenue, often by creating new government programs. Lawmakers themselves later
classified some of this additional spending as "non-essential." Only in periods
of recession has state spending abated, largely due to the decline in available
tax revenue.

The SOS spending limit would have produced annual state
spending in fiscal 2007 that is almost identical to the current state budget.
This similarity suggests that Michigan government could have financed programs
within the boundaries of the SOS spending cap.

An estimated $8 billion would have been rebated to Michigan
taxpayers between 1995 and 2007 under the SOS proposal. It is possible that this
de facto tax cut could have improved Michigan’s economic performance. The
largest tax rebates would have occurred on the threshold of the current
recession.

These rebates would have resulted in less state government
spending, but Colorado’s experience with a state spending cap based on
population and inflation suggests that lower levels of government spending do
not necessarily lead to a decline in quality of life.